Strict Vietnam Lockdown Causing Supply Chain Disruption 01/09/21

On 23^rd August, Ho Chi Minh City implemented its strictest lockdown restrictions so far. Residents have been instructed not to leave their homes for a period of at least two weeks, even for food. The military has been deployed to enforce the lockdown and deliver food to the worst affected districts.

Factories are permitted to continue operating under strict “closed loop” conditions that require workers to sleep onsite. The neighbouring provinces of Long An and Binh Duong also have similar rules in place.

The Vietnam Textile & Apparel Association has said that around 30-50% of garment factories have been forced to close as they are unable to meet the regulations, resulting in cancellations and rising costs associated with housing employees.

Where factories are able to continue operating, it is reported that they are running at around 50-70% of nominal capacity. Some operations have been slowed due to port congestion, delayed customs checks and tight shipping capacity, and this has resulted in depleting inventories and stockouts of components and raw materials.

Some concerns have been raised that Vietnam’s position in the global supply chain may be under threat as ongoing lockdowns make it difficult to absorb costs and maintain motivation among staff.

Our Customer teams in Vietnam continue to work tirelessly to find solutions to minimise disruption to your supply chain. If you would like to discuss any specific bookings, please get in touch. We’re here to help!